Critical Success Factors For E-Invoicing Implementation – DHL’s Lessons Learnt

At our recent conference, e-Invoicing Europe 2012, Gabrielle Philippens, Senior Process Consultant at DHL, discussed the critical success factors for DHL’s journey to implementing electronic invoicing.

In 2007 DHL began their process with the aim of:

• Creating operational efficiency through the reduction of manual activities

• Reducing the cost of finance

• Transforming the AP department from pure invoice processing to exception handling only

The results are compelling.

1. DHL now has over a third of suppliers submitting their invoices electronically

2. Their aim of increasing operational efficiency through the reduction of manual activities has been achieved

3. e-Invoices are processed three times faster than paper invoices

4. Around 40% of invoices are now posted automatically

5. The cost of finance has also been reduced by reducing the cost of invoice processing from €4.50 per invoice in 2007, to 0.92 cents today

6. So far 500,000 electronic invoices have been received and DHL has seen a saving of around 1.7m Euros

Critical success factors

Converting to e-invoicing is not rocket-science, but it’s not the easiest of projects either. Often the success boils down to a few actions.

Here Gabrielle shares DHL’s critical success factors:

• Internal communication: Everybody in the organisation who has any contact with suppliers needs to know about the project. Why? Because when a supplier calls in asking if they should listen to this ‘crazy letter they received asking them to do e-invoicing’ you will want that point of contact to know what the formal response is. Failure to do this will result in your intentions being undermined

• 80% of your time should be spent on internal communications in order for everyone to be aware of the project, support it and actively promote it with a single voice

• External communication: A strong message must be given to suppliers outlining due dates and consequences of failing to comply with your request

• Any letter needs to be signed by senior management within the country of the organisation

• It is important that you find the right contact within the supplier organisation in order to get the message across. You may have to do some data cleansing first

• If possible, it should be your organisation that contacts suppliers. DHL found that many suppliers did not believe that a call from the service provider, OB10, was legitimate and instead believed they were trying to sell them something on the back of a well-known company

• DHL used initiatives like supplier forums to inform the suppliers of what was happening and had an OB10 representative there to answer any questions

• Dedicated people: You need dedicated people within the organisation who can spend the majority of their time supporting the project

• The involvement of procurement is also absolutely crucial. Without them you will find it difficult to effectively on-board your suppliers

• Follow up the Refer-To-Buyer process: If a supplier is refusing to join the program, a member of procurement needs to contact them in haste and actively chase and push them to on-board

• PO and workflow system: You need to have a good PO and workflow system in place to create a fully automated invoice processing system. You will need to ensure that this is the case before embarking on the project so the transition can be as smooth as possible

Best practices

DHL has now also developed a number of best practices that were seen as successful throughout their implementation. In a special interview with Susie West after her presentation, Gabrielle shared her top three best practices for implementing e-invoicing.

1. Co-operation between finance and procurement. At the start of the process, the move to e-invoicing had been a finance driven project. DHL found that their best results where only realised once procurement had become fully involved and supported the project

2. Absorbing supplier costs. DHL has a sensitive relationship with some of their suppliers with an interchangeable supplier / customer relationship. This meant that they had to treat certain suppliers with sensitivity. To manage this, DHL paid for these strategic suppliers to enrol with OB10. These suppliers are now paying their own way on the e-invoicing network, but this ‘grant’ gave them a push and incentive to begin sending their invoices electronically

3. Interoperability. This has been a factor in DHL’s success. In some countries suppliers were already using electronic invoicing with a different provider to the one chosen by DHL and were therefore unwilling to add a new connection to trade with OB10

See Gabrielle’s interview with Susie West in the video below.